Correlation Between Yokohama Rubber and WEIQIAO TEXTILE

Can any of the company-specific risk be diversified away by investing in both Yokohama Rubber and WEIQIAO TEXTILE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Yokohama Rubber and WEIQIAO TEXTILE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Yokohama Rubber and WEIQIAO TEXTILE H , you can compare the effects of market volatilities on Yokohama Rubber and WEIQIAO TEXTILE and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Yokohama Rubber with a short position of WEIQIAO TEXTILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yokohama Rubber and WEIQIAO TEXTILE.

Diversification Opportunities for Yokohama Rubber and WEIQIAO TEXTILE

0.0

Correlation Coefficient

Yokohama Rubber  WEIQIAO TEXTILE

Pay attention - limited upside

The 3 months correlation between Yokohama and WEIQIAO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Yokohama Rubber and WEIQIAO TEXTILE H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEIQIAO TEXTILE H and Yokohama Rubber is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on The Yokohama Rubber are associated (or correlated) with WEIQIAO TEXTILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEIQIAO TEXTILE H has no effect on the direction of Yokohama Rubber i.e., Yokohama Rubber and WEIQIAO TEXTILE go up and down completely randomly.

Pair Corralation between Yokohama Rubber and WEIQIAO TEXTILE

If you would invest  1,950  in The Yokohama Rubber on October 17, 2024 and sell it today you would earn a total of  50.00  from holding The Yokohama Rubber or generate 2.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

The Yokohama Rubber  vs.  WEIQIAO TEXTILE H

Yokohama Rubber

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Yokohama Rubber are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, Yokohama Rubber is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

WEIQIAO TEXTILE H

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WEIQIAO TEXTILE H has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, WEIQIAO TEXTILE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Yokohama Rubber and WEIQIAO TEXTILE

The main advantage of trading using opposite Yokohama Rubber and WEIQIAO TEXTILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yokohama Rubber position performs unexpectedly, WEIQIAO TEXTILE can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in WEIQIAO TEXTILE will offset losses from the drop in WEIQIAO TEXTILE's long position.

The idea behind The Yokohama Rubber and WEIQIAO TEXTILE H pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.